THE MEDIA BUSINESS

By ALEX S. JONES

Published: August 28, 1991

The chief executive of United Press International said yesterday that the troubled news agency would file in New York today for protection from creditors under Chapter 11 of the Federal Bankruptcy Code.

Pieter VanBennekom, U.P.I.'s chief executive, said that the news service would continue to operate as usual and that the filing was a way to resolve debts of approximately $50 million that had hindered efforts to sell the company.

"There is strong and sustained interest on the part of several groups outside and inside the news business," he said. "But certain issues from the past -- liabilities -- make many serious organizations hesitant to come forward."

The 84-year-old news agency has steadily lost clients in recent years in the face of competition. It spent a year in Chapter 11 in 1985 and 1986.

Despite frequent predictions that U.P.I. could not survive, its staff of about 450 full-time and 2,500 part-time employees still gathers news that appears in about 3,000 newspapers and broadcast stations worldwide, generating annual revenues of about $35 million.

Mr. VanBennekom declined to name any of the prospective buyers, and said that negotiations were not near completion with any buyer. Possible Bidders

The Toronto Sun Corporation, the Press Association of Great Britain, and Milton R. Benjamin, a former president of U.P.I. who heads a Washington consulting firm, have been identified in news reports as having some interest in acquiring the news agency.

U.P.I. is owned by Infotechnology Inc., which filed for Chapter 11 bankruptcy in the spring, and about half of U.P.I.'s $50 million debt is owed to Infotechnology or other associated companies.

H. Sean Mathis, a consultant to the shareholders of Infotechnology, said that U.P.I.'s bankruptcy would be consolidated with that of Infotechnology and Financial News Network Inc., the former owner of the Financial News Network, which it sold. Infotechnology owns a big stake in Financial News Network Inc. Breakdown of Debt

Mr. VanBennekom said that about $10 million of U.P.I.'s debt is in current payables, $3 million in liabilities remaining from the previous bankruptcy, and $10 million is associated with litigation and other payments that are in dispute.

Another $2 million in debt comes from the earlier bankruptcy settlement in which creditors were issued 100,000 shares of stock that U.P.I. committed to redeem upon demand for $20 a share after June 11, 1991. Notice of Redemption

Two weeks ago, the creditors notified U.P.I. that they wished to redeem a significant part of that stock. Mr. VanBennekom said the notification was the catalyst for filing for bankruptcy. But he said that he had concluded that a bankruptcy filing was necessary in any event before a buyer could be attracted.

He said the news agency was now operating at approximately a break-even level and could continue to do so as long as revenues did not significantly decline and creditors could be held at bay.